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February 27, 2006

Skills shortage hampers RFID in America

A dearth of skilled RFID workers has hindered the deployment of RFID systems in North America, according to a new survey by an industry trade association.

By CBR Staff Writer

Seventy-five percent of 80 tech companies surveyed said there was not a sufficient pool of talent in RFID technology for them to hire from. This is down slightly from 80% of companies surveyed a year.

But most of the companies recently surveyed, or 80%, said the talent shortage would affect their adoption of RFID. This is a sharp increase from a year ago, when just more than half, or 53%, of companies said the lack of skilled would negatively affect their RFID usage.

Seems companies are currently trying to make do with what available talent they can find, but the limitations will put the brakes on more widespread RFID usage.

Anecdotally, we’ve heard that in some cases people are learning on the job, said Steven Ostrowski, a spokesperson for the Computing Technology Industry Association, or CompTIA, which conducted the survey.

We’ve also heard that people who do have the skills and can demonstrate them are able to charge a premium for their services, Ostrowski said.

The survey was released as the RFID World conference kicked off in Texas yesterday, where many vendors are touting new and improved technologies ranging from hardware to collect RFID data to applications that integrates the data into enterprise networks.

Demand for more skilled workers is being generated by RFID vendors, resellers and consultants, as well as the end customers, Ostrowski said.

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Part of the reason why so many companies expect to be negatively affected by the skills shortage is the sluggish RFID market itself, he said.

The level of RFID deployments last year was not great, partly due to the cost of RFID tags still being fairly high and the fact that the business case and return on investment wasn’t there for many companies, Ostrowski said.

While last year saw a price war among RFID tag and reader makers, RFID hardware remains cost prohibitive for many large-scale projects. RFID tags, which are mostly being used at a case-and-pallet level, rather than on individual items, generally cost in the 15-cent to 20-cent range per tag.

It is widely thought that the magic price point for tags is sub-10 cents, in order to spur widespread adoption. However, CompTIA sponsored a study last year that found it would be at least another year or two before the price of tags dips below the 10-cent mark.

Still, Ostrowski pointed out that about 60,000 companies in North America this year will face deadlines to comply with RFID usage mandates from the US Department of Defense and the world’s largest retailer, WalMart.

But just 8.6% of the recent survey’s participants said they don’t foresee any future difficulties in deploying RFID projects.

About half of the survey respondents said RFID training and education, which includes knowledge of radio physics, was difficult.

Some of the participants were not even familiar with RFID before they took the survey. A little more than 43% said they had examined RFID but had not begun any projects, while about one third of respondents said they had not taken the time to investigate the technology. Just 15% had begun pilot RFID projects.

CompTIA hopes to help boost the level of skilled workers in the region by launching a new certification program on March 28 called CompTIA RFID+. The certification, which will be available worldwide, is geared for tech workers with six to 24 months’ experience in RFID. Applicants will sit for exams on installation, configuration and maintenance of RFID hardware and device software, as well as site surveys and analysis.

It’s a way to validate baseline skills in the technology, Ostrowski said. It’s not so much about the technology and what you do with the data once you collect it, but in the deployment and the day-to-day management of RFID systems that we’re looking to validate with this certification.

The certification program is not the first for RFID but it is different in that it is vendor neutral, Ostrowski said. The program has been developed for the past year or so in conjunction with about 25 RFID vendors, including leaders Intermec, Symbol Technologies and Texas Instruments.

The latest survey also showed that about 41% of respondents planned to offer RFID products and services sometime during the next three years, up from 37% a year ago. Fewer than 12% said they do not expect to sell RFID-related products during that time.

Of those that plan to offer services, most respondents have their sights set on installation and maintenance services, followed by software implementation. Just under half, or about 47%, expect to offer a combination of services, according to the survey.

However, more than half, or 58%, of respondents said finding customers for RFID technology was difficult. Almost half of the respondents in the recent survey had $2m or less in annual sales.

CompTIA represents 20,000 companies worldwide in public policy, skills development and other business interests.

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